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Drexion2004: The $1.2 financing price might be accurate and reasonable, but don't expect the stock to sink to that level.
A stock I own, DCTH, did a secondary offering a month or more back at $3.60, and the stock has stayed well above that number, currently $5 a share. Either the number crunchers who price these big transactions are dumb or the people who buy the stock at market price are dumb. Or maybe both are smart!
Regardless, I just came upon this stock today thanks to a post Bobwins made on another board. I hate China microcaps, but it is hard to resist the kind of growth this company is experiencing.
Big revenues and eps growth potential in an industry that is basically industrial with a "green" angle. What is not to like?
As I do more dd, I'm sure to find some things!
CPQQ - Very difficult to predict -
I am assuming that the Q3 margin of (1.3/5.9 = 23%) is the normal. In Q4 they put money into capacity growth. And this financing, no matter the terms, will help double the capacity, or more. Of course demand is almost unlimited in their special 'preferred product' case. However, with a doubling of production by end of 2010, a linear increase to the end, and 22% margin, I see the next four quarters revenues/earnings of 48M/11M. At the current price and assuming 20M is shares outstanding, the foward PE is 6.5. If the shares outstanding is 25M (we still are unsure) the forward PE is 8.
So I don't see the enthusium to continue the support of the price as it occurred today.
BTW, I currently don't own any. Sold at the last 10Q.
Dick Milde: Yes and another 52 week high at the close today
Pappy
I don't think that after that candle today there will be another opp to buy below 3 dollar. Today we saw there were more than plenty of buyers in the 3.30 area. Almost no sellers below that price. So unless the whole market collapses or CPQQ brings out a bad new regarding their growth ahead I think we don't see 3 anymore here.
And again regarding the warrants I refer to the answer from management a few days ago.
My question:
2. I realize that there are still 4.5 million warrants outstanding. I think they are not exercised if I'm not mistaken. Do you know if these warrants are included in the fully diluted share count right now or not? And is there any timeline or plans when the warrants will be exercised?
The answer:
The effect of the warrants are included in the diluted EPS calculation, as you said.
The detailed information about the warrants is shown in our SEC Form 10-K. The warrants may be exercised until they expire on 2010 and 2011.
Some facts for the market has yet to digest;imo
The approx 4.5m in the money warrants had not been exercised according to the 3rd qtr report.
4,1666,667 convertible "b" preferred to raise $5m figures out to about $1.20 pps of new common stock + warrants for 1,000,000 additional shares @$2.40.
All told this brings 3rd qtr shares outstanding of around 14m used to calculate eps of $0.09 up to almost 24m shares reducing reported 3rd qtr eps to approx. $0.05.
I believe 3rd qtr numbers were already overstated because the in the money warrants were not included imo.
When I sold my shares earlier I did so with the intention to buyback on a 20% pullback. cancel that although I still think the longterm warrants me buying back at a pps under $3.
The terms were very bad but the amount of money raised is limited and since this capital was sorely needed this capital-raising was betten than foregoing fast expansion in production. The strange thing is that Chinese companies are at the mercy of extremely greedy US financiers.
Looks like cooler heads prevail...
The offering price was set some time back, it's not like they are desperate for finding a buyer. The outlook for CPQQ is huge given the China mandate to upgrade transformers.
I'm still holding all my shares.
Dick Milde
So much for a sell off....
I got lucky, I just don't like graphs like what CPQQ has. They scare me (grin). I had bought the shares around $0.90 originally so had to get out, I didn't own many though...
I would say we go below $2.5 on this pullback, I'll start buying around $2.2 or so.
If we don't go that low, I guess i'll stay out of CPQQ.
-Fernando
Didn't know that you sold everything Fernando. That was good timing as we know now. I sold about 40% above 3 but all in all I don't think that the financing will bring down the share price that much. 3 is the lowest I can imagine because people want eagerly in here because they see all the growth in the next 2 years. Just remember what BSPM did when they announced a financing at 1.75 while the stock was trading at 2.50 or so. It went straight up within a few days after that announcement.
Interesting also the answer I got from management a few days ago when I asked about possible financing......
I'm just glad I sold everything on this last jump above $3.
I'm eagerly awaiting a good entry point, i'd sob with happiness if they drop back down to the $1.2 financing number (laugh).
Now I gotta decide at what point I start buying again....hrm...
-Fernando
Ok, that would make sense Drex, Warrants are usually placed higher normally but even they are beneath the common A third buying opportunity - Traders must love this stock.
rich
As I read their PR, my understanding is as follows:
For $5M cash, the company gave away: 4.166M preferred shares and 1M warrants (2.4 strike). That means each common share was given away at a 5/4.166 = $1.20 price.
So they did the financing at like 1/3 the current price-per-share? Ouch! This is even worse than the LPIH financing that happened!
I guess they set the terms awhile back and the stock kept going up too fast, so thats how stuff like this happens...
I would not be surprised to see the stock drop big on this news... May present a good buying opportunity if you can find the bottom.
-Fernando
CPQQ Financing
China Power Equipment Completes a $5 Million Equity Financing
XI'AN, China, Dec. 4 /PRNewswire-Asia-FirstCall/ -- China Power Equipment, Inc. ("China Power", OTC Bulletin Board: CPQQ), the manufacturer of a new generation of energy saving electric transformer cores and transformers in the People's Republic of China, is pleased to announce that it has successfully completed a US$5 million equity offering in a private placement to certain accredited investors.
The investors purchased 4,166,667 shares of Series B convertible preferred stock (the "Series B Preferred Stock") in the aggregate and warrants to purchase a total of 1,000,000 shares of China Power's common stock at an exercise price of $2.40 per share, subject to adjustments. Each share of Series B Preferred Stock can be converted into one share of China Power's common stock at the option of the holder. The Series B Preferred Stock does not pay annual dividends and shall not have any voting rights except as required by law. The warrants are exercisable for a period of three years from the date of issuance. Under the terms of the warrants, China Power has the right of redemption and mandatory exercise of the warrants under certain conditions.
China Power will use the net proceeds in its Chinese operating subsidiary to expand its amorphous alloy transformer core production primarily by completing the current plant under construction, by improving existing production lines, and by increasing working capital.
China Power expects that its expanded capacity will help to meet the demand for its amorphous alloy cores that is expected to increase at an increasing rate for several years.
The high demand is due to the Chinese government mandating amorphous alloy transformers to gradually replace the country's old steel core electric transformers because the amorphous alloy units are far more energy efficient.
For example, a typical amorphous alloy core transformer consumes 150 watts to operate, which is 77.6 percent less electricity than a comparable silicon steel core transformer, which requires 670 watts to operate.
Since an amorphous alloy transformer consumes less electricity, it reduces the need to generate electricity. In turn, less coal is burned to provide the same net electricity to the consumers. The result is lower air pollution. To illustrate the pollution reduction, compared to a silicon steel core transformer with the same capacity, each amorphous alloy core transformer is estimated to reduce pollutants from coal combustion each year by 3,972 kilograms of carbon dioxide, 120 kilograms of sulfur dioxide, and 60 kilograms of nitrous oxide. Both transformers in this comparison are assumed to be operating at 315 kilovolt-amperes while stepping down 10,000 volts to 220 volts, which is the consumer voltage in China.
Mr. Yong Xing Song, Chairman of the Board of China Power Equipment, said, "We are very pleased to complete this financing that will help continue our growth and success in the high-growth amorphous alloy core business. Our capacity expansion will enable us to win and deliver larger orders for transformer cores and to generate very attractive positive operating cash flows. The positive cash flows will also help us expand into our new line of amorphous core transformers.
"Because China is upgrading to amorphous alloy electric transformers in both urban and rural areas, the demand for our amorphous alloy cores and transformers is expected to continue to increase at an increasing rate for several years."
Including the common shares and warrants issued in this financing, China Power's common shares outstanding on a diluted basis were about 20.1 million shares on December 2, 2009.
The documents relating to this private equity placement are available in China Power Equipment's recent filings with the Securities and Exchange Commission, which are available from the SEC at http://www.sec.gov/ and from the company's website at http://www.chinapower-equipment.com/ .
About China Power Equipment, Inc.
China Power Equipment, Inc., through its wholly-owned subsidiary, Xi'an Amorphous Zhongxi Co., Ltd., has developed a proprietary patented technology to produce a new generation of energy saving transformers and transformer cores. The company currently manufactures 40 models of transformers in four product series that are sold throughout China. The company was formed in 2006 as a U.S. corporation, and in November 2006, created a Chinese subsidiary that was granted a license as a privately held wholly owned foreign enterprise by the Chinese government.
I have read everyones responses to my post many times and want to thank you again. We all sort through many volumes of information each day, week, month to make up our belief system. We can only trade/ invest in our beliefs. I fell what best describes my investment goals is Warren Buffet's quote (I maybe paraphrasing):
" The 19th century belonged to England
The 20th century belonged to the United States
and the 21st century belongs to China
Invest accordingly"
I totally believe this and trying to structure my trading/Investing to embrace this philosophy!!
A friend of mine from Smallwood New York introduced me to investorshub and glad to be a part of this site!!!
I guess it all comes down to what we are comfortable trading. I tend to like stocks making new 52 week highs (much less people around to sell). Reason tells me to sell 25% or 50% now while I have made such a nice profit. there is something that keeps screaming at me that this is just the tip of the iceberg with CPQQ. Time will tell. >>> I can only wish us all the best <<<
I have 25 years trading experience. I just came off of 2 years trying to design an completely automated system to day trade the NASDAQ equities markets. Trading my own account. It was my dream to do this and 2 years later (last August) the best I could do was break even, this after 1000's of hours of day and night work. Such is life i guess. Many would look at this as a failure but the irony is that since last December forcing myself to hold positions for an average of 3 to 6 months and adding fundamental analysis to my purely technical approach I have a 228% gain in my account (last December to now).
The optimum question is; can I do something like this for the next 12 months?? Time will tell.
I want to think that I learned a lot while failing :)
Best to you and good night!
I did just the opposite holding onto my bspm while selling my cpqq.
I just feel its fully valued for a bb stock at the present time.
Good luck guys. On a pullback I will be waiting.
Has anyone heard how they plan to finance the completion of the new plant by mid 2010 someone said they got a e-mail reply but don't remember who that was.
Hi,
I sold my BSPM for now I didn't like the chart.
CPQQ:
Do the fundamentals warrant $4.00, because it sure seems like its making its way there ..... time will tell!!!
I guess investors/speculation is looking a good deal ahead?
CPQQ:I am a happy camper w/ 20.799K shares :) up 88.81% in a month!
pretty incredible to say the least!
Eh? BSPM has not competition or at least no one is going to come up with OTC Hep B drug due to a grandfather rule (Drexion wrote about them)... hmm probably the wrong board to discuss BSPM.
rich
my China stocks in size order are cpqq.ob, ceu, bspm.ob, sbay.ob, nep, aln, ltus.ob, crji.ob. I am planning on adding to nep and leaning towards selling aln. Been trying to sell crji.ob but no liquidity. Surprised that cpqq.ob has done so well before the new factory is even close. High hopes for bspm.ob but lots of competitors. Good luck!
I agree with your points of view. I personally am invested in CGKT, CPQQ, BSPM and SBAY. Not long ago CNOA was my favorite but it was a let-down that the activity that last year had created two-thirds of the profits contributed next to nothing last quarter. I lost interest in SCLX because of its financing among other things. SBAY (MYST) had been disappointing so far because of its rapidly increasing sharecount.
I'm sure Snow would also point out that the receivables are 3M versus revenues of around 8M - which is pretty good. And that in the last quarter, at least, CPQQ was financing growth through free cash flow - obviously the longer it can delay any financing the nearer we will be to the opening of the new factory and the better the terms will be.
rich
The Chinese microcaps present a great opportunity to make or lose money. The Chinese economy is exploding and the microcaps represent a tremendous opportunity to buy cheap, fast growing companies at a discount!
With reward comes risk. Many do dilutive financings that seem crazy. I'm not sure if it's bad advice from their American advisers or that the Chinese owners are shady. Certainly the ownership structure is something I try to figure out because they have silent owners, complicated cross ownership and ownership thru multiple companies.
My approach is that the rewards compensate for the risk. I look for fundamental situations that I like and load up. If the fundamentals change or they prove to me that they are going to dilute the stock, I exit. We can only research so much from here. I try to do the best job I can but occasionally I get fooled. I could get mad and never invest in China again but I think that is crazy.
We are investors looking for opportunity. China represents the world's next economic superpower. How can you not invest in that country? The high growth creates some of the dilutive situations you mention. Their high growth creates the need for financing, even though the companies are typically very profitable. Internal profits can't finance 200% YOY annual growth rates or new factories that will quadruple output.
Overall I intend to continue to kiss a lot of frogs until I find a prince! or Princess, I hope! CPQQ is my next princess and should go much higher.
Bobwins
How you look upon the fact that Chinese microcaps tend to raise money to finance expansion however dilutive the terms they get are? A case in point would be SCLX. Another negative point I think is that these companies seem to finance the activities of their partners to a great extent. This leads to very high accounts receivables and more dilution to finance this.
Investopedia has some good educational articles. It's a very good website to just look up financial terms you find but don't understand. Bobwins
http://www.investopedia.com/articles/fundamental-analysis/
THANK YOU ALL!!!! You are all very kind to help me. It will take me a while to digest all that you have said. I am printing this great stuff out and keeping it on my desk for reference :)
Best To You !!!!!
NickC Yup, the best information about CPQQ comes from filings.
Once you step away from that then the company is about growth as you can see as our P/E is, gulp, above 10 (nose bleed stuff for Chinese stock). The best bit of information is about this is the PRs. They have been bullish about their results saying second half of 2009 would be better than first (so far this seems to be true).
In the PR's they have also said that next year the revenues would be at least 200% higher than this year - basically they are building a new factory. Currently this is from free cash flow but they could be dilution. I think someone talked to the company about this and got a figure of $5M? (anyone?)
Finally, it's also about demand - and basically the Chinese want to upgrade their electricity grid and can supply keep up?
good luck
rich
As always a good sumary of fundamentals by Bobwins.
I would only add that cashflow is even more important than earnings.
I like the big revenue growers that are cheap. When I say cheap I mean that revenue is growing much faster than accounts receivable.
And if they have big revenue & cashflow growth with good collection of receivables the prospect of continuing to grow rapidly with minimal dilution is increased.
Being able to read a balance sheet is a must.
Bobwins is one of the best at fundamental analysis.
Let me add a little bit to help clarify... The balance sheet is a picture of what the company looks like at a point in time. When looking at a balance sheet you will find that it is divided into two basic parts... Assets and liabilities. If you subtract all of the liabilities ( what the company owes to others ) from the assets ( what the company owns ) the amount that's left over is called stock holder equity. You would like to see stock holder equity growing but not because the company is selling stock but because of good operating results. Check the current assets and compare that number to current liabilities. Current assets should be at least as high or higher than current liabilities so that the company can pay it's bills that are due in the near term. A company that is out of cash with a lot of current liabilities ( bills due ) will very likely be borrowing money to continue operations. Also, it is usually desirable for a company to have little or no long term debt. Debt costs money and can reduce earnings performance. A reasonable amount of debt is good if put to proper use so that the company can grow faster. For example, in the case of CPQQ, they seem to be in the right place at the right time so if they borrow some money I'm confident they will put it to good use for overall benefit. Be skeptical when debt is used to support short term operations...
A company balance sheet is the same as your personal balance sheet:
Take what you have and subtract what you owe and you come up with your net worth ( stock holder equity ).
If you can't pay your bills and start using your credit card you will soon be in trouble! And so will most every other company.
There will always be exceptions but invest your money based on what you know and understand... Not on what you hope for.
Good luck.
Dick Milde
SEC docs are the best source for microcap companies. This page is always open on my browser.
http://www.sec.gov/edgar/searchedgar/companysearch.html
I review the latest 10Q closely for the financials but most importantly the notes. PR's typically contain only good news but they have to present the whole picture in the 10Q and the financials also give clues of where to dig.
I also look for any company presentations because they typically tell the basic story about the products, sales, competition, markets and outlook.
I look for the typical signs of undervaluation. I want profits at a cheap price. So I check for p/e ratio first. Then I check shares outstanding and fully diluted share count. I look for catalysts that will increase revs and eps in the future. I try to calculate what I think the shares are worth now vs current prices. I also try to project what revs/eps will be after the catalysts happen.
Once I have a valid candidate based on this inital review, I dig deeper into the balance sheet and P&L. I figure out if they need to raise money and if there are shares coming to market soon. I want to make sure they are collecting their sales revs and that their assets are legit and debts are being repaid as agreed.
Overall, you are building a picture of the company based mostly on their viewpoint. You need to collect as much info as possible and decide if the picture is true. In order to get as clear a picture as possible, you need to find some independent info. Sometimes it's reading the 10Q of competitors. Sometimes there are background articles about their industry. Google it!
The more stocks you review, the more info you will have to base your judgements on. The good ones will jump out at you, in terms of valuation, mgmt, potential.
I also try to form a general theme for my investments.
I am high on China. Their growth is extraordinary. I want companies that will be a part of that growth for many years to come. I want companies that are producing for the internal economy of china. Most of their manufacturing capacity is built for export but China's advantage of low costs won't last forever. I would rather focus on companies that will benefit from the rise of the middle class in China.
The power grid is basic. The investment to bring it up to developed world standards will take decades. CPQQ is in the middle of that trend with a proven product that saves energy.
Good luck and let me know if I missed the intent of your question.
Bobwins
Bobwins: I am weak in fundamental analysis. Fair (at best) at reading balance sheets and income statements but weak in general (working at it each and every day)!!!
Where is the best source to get this fundamental data on CPQQ??
Sorry if I am minimizing your craft.... just don't know??
Thanks!
NickC...... Sunny Florida :)
Technicals: My technical outlook played out today! I really appreciate everyones input on the fundamental outlook (this is where I am weak).
Technicals: Where we go from here?
With this new price level I feel that anything I have posted in terms of technicals in the past have now been wiped out in half (50% more risk). Only new price action will reflect a new POSSIBLE glimpse into the future... and that always with a grain of salt !!!
Having said that and holding my total position firm:
I like the way CPQQ stayed above $3.00 today. Strongly above $3.00 which is very refreshing (strong):)
I feel that people are looking to the future and biding the price higher.
All else in my eyes is pure speculation.
A GREAT day today ....see how we go from here!!!!
Again thanks for all your fundamental posts ... Love IT (and very helpful)!!!!
We will look to see how much price tends to trail down over the days to come and price breakdowns from this new base. This may give us some indication of time to come. December may give to weakness (and possible price manipulation due to decreased volume). I do like the way real time price action tends to leave the stock price at higher levels instead of lower levels (almost like someone wants the stock to look good instead of bad. this is not always the case and nice to see!!!)
I hope you all had a GREAT Thanksgiving... I surely have a lot to be thankful for in and out of the stock market.
The BEST to you and have a GREAT Day.
NickC ..... Sunny Florida!!!!
$3.20 all time highest close!
Looks good!
Dick Milde
There she blows mates another 52 week high on strong volume this time.
Hi Dick,
The 1.4million number in construction in progress is what they have already spent on the new plant. What we don't know is how much the new plant will cost. We don't know if it's going to cost a total of 3 million or 5 million or ???
So it looks like cpqq is doing what you suggest and funding most expense thru cashflow. After the big pop in price, they could easily have arranged a share issuance, if that was their plan. I am guessing that they know the warrant holders pretty well and are expecting to get some of the money from the warrants to finance the building. That plus the cashflow from operations is probably sufficient to finish the construction.
I wish they were more upfront about the total costs and the time to completion. They know the total capacity of the new facility will be 5,000 tons but the rest is a mystery.
I have a good feeling about mgmt and their view of dilution. Notice that there are very few, if any, options out there. Mgmt & directors already own
23.5% of outstanding stock. Insiders listed in the 10K own the rest. There must be duplications listed because the total ownership listed in the 10K is more than 100%. Suffice to say, there isn't a lot of public float out there for cpqq.ob.
Overall, this is a great situation. CPQQ.ob has a product that is mandated by the Chinese government to replace existing equipment and to go into new power lines. They are building capacity to produce multiples of current production that will come online in 2010. They are profitable and increasing sales and net profits each qtr.
My initial shares were bought at 1.14 but I am still buying because the doubling of revs in 2010 will lead to more profits.
Bobwins
Note 4 Property Plant and Equipment
In the recent Q report they indicate that they have "Construction in progress" valued at 1,459,578. With net income for the quarter of $1.4 million after taxes they should easily be able to pay for that out of current operations. Also, the entire current "Plant, Office Building and Machinery and Production Equipment" is valued at about $3.3 million. It's not unreasonable that they could double the size of the current operation using existing cash as it is generated by operations and not sell any stock or go into debt. It all depends on how conservative they want to be and more important how well they are able to collect receivables, the China micro caps have a terrible track record re the receivables part of the balance sheet. Right now it looks like the sales growth is faster than receivable collection which has a tendency to reduce cash flow.
Anyway... It looks like they can double the plant for no more than a 10% dilution of the stock if they decide to do it that way. If I were running the place I would take a construction loan and pay it off out of operations and not dilute the stock.
http://sec.gov/Archives/edgar/data/1418134/000118518509001154/chinapower10q093009.htm
Dick Milde
$3 remains resistance but I like the way it has held up especially Friday when other stocks seemed to have trouble bouncing back.
The reason I continue to hold a core position in stocks like ckgt before it and now cpqq is visibiltie of earnings.
True I have sold my trading shares in both along with a 3rd amigo bspm while keeping a core position.
Currently I see very strong earnings visibilty for cpqq thru at least 2011 about as far ahead as anyone can expect to project any stock because unknowns come into play.
As Bob pointed out they haven't said how they will come up with the money to finish the 5000 ton expansion although cashflow has been enough to start the project.
We will no where that money will come from soon if they have plans to have it finished by the 1st half of 2010 as the CEO stated.
If that does effect the short term pps I plan to buy back my trading shares at that time.
Back to the earnings visibilty the CEO stated they plan to increase production 200% in 2010 over 2009 and I will continue to take him at his word until he fails to deliver.
Since they plan to increase capacity from 1000 to 7000 tons by the middle of 2010 that leaves room for further production gains in 2011 as well.
I wonder how long it will take to move above 3 dollars? The pps looks more or less stuck at around the current price.
Bobwins: Thanks for the Fundamentals update. I have a much stronger background in looking at Technicals Vs Fundamental and really appreciate your posts!!!!
THANKS!!!
Next to look for:
We will see how CPQQ will fair tring to punch through the $3.00 physiological barrier.
Time will tell!!
(I bought more this morning) .... I am banking on long term price progression. Especially if CPQQ uplists to NASDAQ or AMEX !!!
Technicals (Dubai news):: Wahoo: CPQQ is very strong compared to other stocks. When you look at the hit the DJIA, NASDAQ composite, and the S&P 100 took during the Dubai news this morning and CPQQ very quickly rose back to its trading range (the same place its been trading during the last 3 days). Most other stock have not even come close to coming to their previous trading price levels!!! CPQQ is VERY STRONG!!!! CPQQ investors obviously thought that CPQQ was a huge deal during the downturn and immediately bid it back up to yesterday's levels.
I don't know if the rest of the market will come back today or not but I am thinking of buying more of CPQQ because of this 'Technicals' display !!!!!!!!
Nick ....... Sunny Florida
I reread this portion of the earnings PR as I pushed the buy button this morning. They don't address how they will finish the new plant but everything else is all good.
I especially like the Chinese government has mandated.... will be gradually replaced by amorphous alloy transformers.....
That indicates a longer term buildup in orders. I would rather see a slower buildup in sales that lasts over several years rather than a huge buildup that ends after 2 or 3 qtrs. A slow buildup will allow CPQQ to open that new factory next year and gradually rampup sales and manufacturing.
"We have funded our recent operations mainly through cash generated from operations. We believe our existing cash and cash equivalents will be sufficient to maintain our operations at the present level for at least the next 12 months."
The Chinese government has mandated that in the next few years, China's traditional steel core electric transformers will be gradually replaced by amorphous alloy transformers, because they are far more energy efficient.
For example, a typical amorphous alloy core transformer consumes 150 watts to operate, which is 77.6 percent less electricity than a comparable silicon steel core transformer, which requires 670 watts to operate.
Since an amorphous alloy transformer consumes less electricity, it reduces the need to generate electricity. In turn, less coal is burned to provide the same net electricity to the consumers. The result is lower air pollution. To illustrate the pollution reduction, it is estimated that compared to a silicon steel core transformer with the same capacity, each amorphous alloy core transformer reduces pollutants from coal combustion each year by 3,972 kilograms of carbon dioxide, 120 kilograms of sulfur dioxide, and 60 kilograms of nitrous oxide each year. Both transformers in this comparison are assumed to be operating at 315 kilovolt-amperes while stepping down 10,000 volts to 220 volts, which is the consumer voltage in China.
Mr. Song continued, "China is upgrading to amorphous alloy electric
transformers in urban areas, as well as selecting them as it extends and
improves electric service in rural regions. As a result, the demand for China
Power Equipment's amorphous alloy products is expected to continue to
increase."
Technicals: I agree that $3 as overhead resistance.
I think the chart shows a powerful daily chart pattern that has been developing since 8/18/09. September showed some weakness but since then real chart pattern strength has been displayed.
CPQQ has been making some beautiful 'pennant' chart patterns (showing much strength in Hourly Charts).
A nice gap up yesterday morning at open (again strength).
Technicals look just great to me!
We have some profit taking (breakdown in the chart pattern) this morning which was expected after the nice run up that CPQQ has had in recent days.
I have had 20K shares since November 3rd. Not selling, and a happy camper!!!!
Best to you and have a GREAT day ..... Nick Sunny Florida
$3 is firm resistance at the present.
GOTA Love it :) ..... I knew we would get a nice little pop after that PRnewsWire story that ran last night :)
Thanks Bobwins and GoriliaGorilia for answering my questions!!!!
Have a GREAT DAY!!!!!!!!!
China Power Equipment Reports Dramatically Higher Revenues and Net Income
XI'AN, China, Nov. 17 /PRNewswire-Asia-FirstCall/ -- China Power Equipment, Inc. ("China Power Equipment," OTC Bulletin Board: CPQQ), the manufacturer of a new generation of energy saving electric transformers and transformer cores in the People's Republic of China, reported dramatically higher revenues and net income for the three months ended September 30, 2009.
Third Quarter 2009 Highlights
-- Net revenues increased 252% to $7.89 million in the third quarter 2009
from $2.24 million in the third quarter 2008.
-- Gross profit increased 280% to $1.96 million in the third quarter 2009
from $0.52 million in the third quarter 2008.
-- Net income increased 516% to $1.41 million in the third quarter 2009
from $0.23 million in the third quarter 2008.
-- Diluted earnings per share increased 350% to $ 0.09 per share in the
third quarter 2009 from $ 0.02 per share in the third quarter 2008.
Net revenues were $7.89 million in the third quarter 2009, up 252% from $2.24 million in the third quarter 2008. Net income was $1.41 million in the third quarter 2009, up 516% from $0.23 million in the third quarter 2008. Diluted earnings per share were $0.09 per share in the third quarter 2009, up 350% from $0.02 per share in third quarter 2008.
Net revenues were $16.48 million in the nine months ended September 30, 2009, up 142% from $6.81 million in the nine months ended September 30, 2008. Net income was $3.05 million in the nine months ended September 30, 2009, up 175% from $1.11 million in the nine months ended September 30, 2008. Diluted earnings per share were $0.20 per share in the nine months ended September 30, 2009, up 186% from $0.07 per share in nine months ended September 30, 2008.
Mr. Yong Xing Song, Chairman of the Board of China Power Equipment, said, "The third quarter 2009 was a dramatic improvement in our financial performance over the third quarter 2008, led by amorphous alloy transformer cores that were up 322 percent in revenues and up 354 percent in gross profit from the third quarter 2008. Amorphous alloy transformers in the third quarter were up 159 percent in revenues and up 169 percent in gross profit from the third quarter 2008. To help fulfill the large increase in our customers' orders, we contracted out some production to a manufacturer for whom we provide technical support.
"Our revenues from silicon steel cores and transformer declined because we have exited that product line to focus on amorphous alloy products as our major product lines and are no longer actively marketing steel core products.
"In addition to higher revenues, our expenses remained under good control and our interest expense was lower, so our net income increased 516 percent to $1.41 million in the third quarter compared with the third quarter 2008.
"We have funded our recent operations mainly through cash generated from operations. We believe our existing cash and cash equivalents will be sufficient to maintain our operations at the present level for at least the next 12 months."
The Chinese government has mandated that in the next few years, China's traditional steel core electric transformers will be gradually replaced by amorphous alloy transformers, because they are far more energy efficient.
For example, a typical amorphous alloy core transformer consumes 150 watts to operate, which is 77.6 percent less electricity than a comparable silicon steel core transformer, which requires 670 watts to operate.
Since an amorphous alloy transformer consumes less electricity, it reduces the need to generate electricity. In turn, less coal is burned to provide the same net electricity to the consumers. The result is lower air pollution. To illustrate the pollution reduction, it is estimated that compared to a silicon steel core transformer with the same capacity, each amorphous alloy core transformer reduces pollutants from coal combustion each year by 3,972 kilograms of carbon dioxide, 120 kilograms of sulfur dioxide, and 60 kilograms of nitrous oxide each year. Both transformers in this comparison are assumed to be operating at 315 kilovolt-amperes while stepping down 10,000 volts to 220 volts, which is the consumer voltage in China.
Mr. Song continued, "China is upgrading to amorphous alloy electric
transformers in urban areas, as well as selecting them as it extends and
improves electric service in rural regions. As a result, the demand for China
Power Equipment's amorphous alloy products is expected to continue to
increase."
China Power Equipment, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Revenues, net $7,893,399 $2,239,265 $16,484,070 $6,805,514
Cost of goods sold (5,931,174) (1,722,363) (12,594,625) (5,034,438)
Gross profit 1,962,225 516,902 3,889,445 1,771,076
Operating expenses:
Selling, general and
administrative expenses 318,471 191,336 743,688 527,129
Stock-based compensation 10,887 -- 10,887 --
Total operating expenses 329,358 191,336 754,575 527,129
Net income (loss) from
operations 1,632,867 325,566 3,134,870 1,243,947
Other income (expenses):
Gain on investment 8,827 9,356 60,200 71,609
Other income 20,465 69,754 371,346 83,690
Interest income 31 999 5,846 3,231
Interest expense -- (42,577) (117) (65,879)
Foreign exchange loss -- -- -- (2,712)
Total other income 29,323 37,532 437,275 89,939
Net income before income
taxes 1,662,190 363,098 3,572,145 1,333,886
Income taxes 250,864 133,953 526,436 226,621
Net income $1,411,326 $229,145 $3,045,709 $1,107,265
Earnings per share-
basic $0.09 $0.02 $0.20 $0.10
Earnings per share-
diluted $0.09 $0.02 $0.20 $0.07
Weighted average common
shares outstanding:
Basic 14,908,313 10,886,413 14,908,313 10,881,652
Diluted 14,908,313 14,908,313 14,908,313 14,903,552
The accompanying notes are an integral part of these financial statements.
China Power Equipment, Inc.
Consolidated Balance Sheets
September 30, December 31,
2009 2008
(Unaudited)
Assets
Current assets
Cash $1,754,576 $1,071,038
Accounts receivable, net 3,107,758 2,013,305
Advances to suppliers 115,925 771,407
Inventory, net 627,574 461,634
Prepaid expenses and other
receivables 321,105 257,700
Total current assets 5,926,938 4,575,084
Related party receivables 22,879 97,248
Property, plant, and equipment, net 3,868,178 3,116,422
Intangible assets, net 409,941 220,742
Long-term investment 253,334 236,384
Deposit on contract rights 1,316,251 1,313,064
Deposit for purchase of equipment 767,813 --
Prepaid capital lease 112,851 116,694
Total assets $12,678,185 $9,675,638
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $545,483 $710,480
Accrued liabilities and other
payables 409,529 409,040
Advances from customers 32,758 142,156
Lease payable-- current portion 1,949 1,944
Note payable 58,500 58,358
Value-added tax payable 118,916 64,686
Income taxes payable 379,613 235,262
Related party payable 1,170 1,167
Total current liabilities 1,547,918 1,623,093
Long-term liabilities
Lease payable- noncurrent portion 117,612 117,327
Total long-term liabilities 117,612 117,327
Shareholders' equity
Preferred stock: par value $0.001 per
share, 10,000,000 shares authorized;
none issued and outstanding at
September 30, 2009 and December 31,
2008 -- --
Common stock: par value $0.001 per
share, 100,000,000 shares
authorized; 14,908,313 shares issued
and outstanding at September 30,
2009 and December 31, 2008 14,908 14,908
Additional paid-in capital 7,186,928 7,176,041
Statutory surplus reserve fund 202,665 202,665
Retained earnings (Accumulated
deficit) 2,582,738 (462,971)
Accumulated other comprehensive
income 1,025,416 1,004,575
Total shareholders' equity 11,012,655 7,935,218
Total liabilities and shareholders'
equity $12,678,185 $9,675,638
The accompanying notes are an integral part of these financial statements.
China Power Equipment, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
2009 2008
Cash Flows from Operating Activities
Net income $3,045,709 $1,107,265
Adjustments to reconcile net income
to net cash:
Depreciation expense 150,202 152,912
Amortization expense 30,692 24,654
Stock-based compensation 10,887 --
Provision of bad debts -- 51,778
Gain on investment (60,200) (71,609)
Changes in operating assets and
liabilities:
Accounts receivable (1,089,566) 298,076
Advances to suppliers 657,035 80,416
Inventory (164,502) (397,721)
Prepaid expenses and other
receivables (62,763) 15,952
Accounts payable (166,641) (179,271)
Accrued expenses and other payables (567) (289,664)
Value added tax payable 54,115 (114,327)
Income taxes payable 143,776 62,790
Advances from customers (109,599) 140,440
Net cash provided by (used in)
operating activities 2,438,578 881,691
Cash Flows from Investing Activities
Acquisitions of property, plant, and
equipment (17,681) (49,214)
Addition in construction in progress (872,341) --
Acquisitions of intangible assets (219,301) --
Deposit for purchase of equipment (767,420) --
Repayment from related parties 74,582 119,612
Dividend from equity interest
subsidiary 43,860 --
Net cash provided by (used in)
investing activities (1,758,301) 70,398
Cash Flows from Financing Activities
Repayment to related parties -- (217,942)
Repayment to short-term loans -- (1,116,312)
Net cash provided by (used in)
financing activities -- (1,334,254)
Effect of exchange rate changes on
cash and cash equivalents: 3,261 98,199
Increase (decrease) in cash and cash
equivalents 683,538 (283,966)
Cash and cash equivalents, beginning
of period 1,071,038 1,073,895
Cash and cash equivalents, end of
period $1,754,576 $789,929
Supplemental disclosure of cash flow
information
Interest paid in cash $117 $112,051
Income taxes paid in cash $382,660 $166,386
Non-cash investing and financing
activities:
Issuance of stocks for advance from
investor -- $100,000
Dividend receivable from equity
interest subsidiary -- $72,962
Reclass long-term investment to
advance to suppliers -- $718,100
The accompanying notes are an integral part of these financial statements.
About China Power Equipment, Inc.
China Power Equipment, Inc., through its wholly-owned subsidiary, Xi'an Amorphous Zhongxi Co., Ltd., has developed a proprietary patented technology to produce a new generation of energy saving transformers and transformer cores. The company currently manufactures 59 different products, primarily amorphous transformers in four product series that are sold throughout China. The company was formed in 2006 as a U.S. corporation, and in November 2006, created a Chinese subsidiary that was granted a license as a privately held wholly owned foreign enterprise by the Chinese government.
Safe harbor
Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements.
The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China.
Additional risks that could affect our future operating results are more fully described in our filings with United States Securities and Exchange Commission. These filings are available at http://www.sec.gov .
We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.
For more information on China Power Equipment please visit our website at http://www.chinapower-equipment.com .
For more information, please contact:
China Power Equipment, Inc.
Tel: +1-866-374-1957 (in the USA)
Email: xa-fj@xa-fj.com
Christensen
Mr. Yuanyuan Chen (English and Chinese)
Mobile: +86-139-2337-7882 (in Beijing)
Email: ychen@christensenir.com
Mr. Tom Myers (English)
Mobile: +86-139-1141-3520 (in Beijing)
Email: tmyers@christensenir.com
Ms. Kathy Li (English and Chinese)
Tel: +1-212-618-1978 (in the USA)
Email: kli@christensenir.com
SOURCE China Power Equipment, Inc.
Future prospects are based on -
1)
From 10Q - 09/30/09
Investing activities:
Net cash used in investing activities was $1,758,301 for the nine months ended September 30, 2009. It was attributable to the capital expenditures of $872,341 on construction in progress for the new 5000 tons capacity plant, $236,982 on intangible asset and automobile and deposit for equipment of $767,420 also for the new plant, partially offset by the dividend of $43,860 received from the 20% equity investment and repayment from related parties of $74,582.
2)
From 10K - 12/31/08
a) They have taken steps to ensure raw material supplies
b) Based on the new plant, they will then have 6000 tons capacity, which will be more than No 2 (where they already compete with a 3000 ton supplier,"BZ" and their sales are 80% of BZ's, and they will be equal in terms of tonnage, at 6000, with No 1, "SZ".
Raw Materials And Principal Suppliers Of Zhongxi
Zhongxi’s amorphous alloy cores have three main raw materials: amorphous alloy ribbon, silicon steel sheet and epoxy resin. Except for amorphous alloy ribbon these materials are currently readily available in its domestic or the international market.
The current supplier of raw amorphous alloy strip for manufacturing amorphous alloy core is Hitachi Metals Co., Ltd., which is the biggest manufacturer of amorphous alloy strip in the world. Zhongxi has taken steps to build a strong relationship with Hitachi, in order to be able to purchase sufficient amounts of the product to meet its needs. Notwithstanding the fact that the supply of Hitachi's amorphous alloy strip is exceeded by the global demand for its product, we believe our relationship with Hitachi will generally permit us to purchase sufficient amounts of material to keep up with our demand. We expect that a new source of amorphous alloy ribbon will soon be available from China An Tai Technology Co., Ltd. We have signed an agreement with China An Tai Technology, where we have been given priority to purchase amorphous alloy ribbon products.
COMPETITION OF ZHONGXI
While many manufacturers are capable of producing traditional transformers, fewer than 20 manufacturers in China have the technology to produce amorphous alloy core transformers and only four are capable of large scale production. As for the production of amorphous alloy cores, Zhongxi is one of only three major manufacturers in China. The other two are Shanghai Zhixin Electric Co., Ltd. and Beijing Zhong Ji Lian Gong Co., Ltd.
Comparative data for Zhongxi and our two main competitors in the amorphous and steel core business is set forth in the table below:
China Power // Shanghai Zhixin Electric Co.Ltd // Beijing Zhong Ji Lian Gong Co., Ltd.
Time of Establishment 2004 // 1998 // 2005
Sales revenues of 2008 (RMB) (1) 65,406,798 // 1,000,000,000 // 82,541,025
Sales revenues of 2008 (U.S. dollar) 9,394,491 // 143,631,728 // 11,855,510
Sales area national national national
Annual production capacity 1000 ton 6000 ton 3000 ton
(1) 2008 sales revenues for Shanghai Zhixin Electric Co.Ltd were estimated based on its sales revenue data up to June 30, 2008 because their audited year-end of 2008 financial statements have not been yet made available.
While Zhongxi’s competitors are larger than it, we believe it has a number of advantages over its competition. Its patented Consecutive Anneal Stove For AMDT Core, permits it to produce its cores at a lower cost than its competitors which we believe will permit it to price its product lower than competitors but keep higher margins. In addition, we believe that its experience as a transformer manufacturer will permit it to offer better service and products that are better designed to meet its customer's needs. Zhongxi’s management also believes that its competitors are totally dependent on imported amorphous alloy ribbon as raw materials while it has taken steps to learn how to use amorphous alloy ribbon obtained from domestic sources which will relieve the supply shortage and reduce a bottleneck to our manufacturing process which Zhongxi’s management expects will continue to plague its competitors.
From the 10Q of March 31, 2009, this table shows on a fully diluted basis, what the holdings and percentages will be. Since no officer, director, or beneficial owner over 5% has filed for selling, and this table adds up to 17,159,686 then out of the fully diluted 19,365,013 that leaves a possible 2,205,327 as the float.
At a stretch, if the electric company sold, that would take us up to 2,765,427
Would love to hear other ideas.
Common Stock All Directors and Officers of the Company as a group 3,517,948 23. 5%
Common Stock Trustees for Alloy Science Shareholders (2) 3,803,625 25.5 %
Common Stock Zhejiang Lvneng Electric Co., Ltd.
1F, Building 3, No.75 Wen Yi West Road, Hangzhou City, Zhejiang Province, China 560,100 3.8 %
Common Stock Friedland Corporate Investor Services LLC,
600 So. Cherry Street, Suite 530 Denver, Co. 80246 (3) 1,451,613 9.7 %
Common Stock & Warrants KWCB Investments, Ltd.
Room B-2403, Yihe Bldg Hanguang Road, Xi'An. Shaanxi Province 710065. (4) 6,087,200 35.86 %
Common Stock & Warrants Jing Li Hay
A9E Intol Apartment Gau Zhang Garden Xibuhe Chao Yang District, Beijing, PRC (5) 869,600 7.37 %
Common Stock & Warrants Yao Gao
Room 5 Unit 2, No1 Xinme High Tech Area, Chengdu Sichuan Province, PRC (6) 869,600 7.37 %
(4) Consists of (a) 3,043,600 shares of common stock and (b) 3,043,600 shares of common stock issuable upon exercise of the warrants. Jin Wu has voting and investment control for KWCB Investments, Ltd.
(5) Consists of (a) 434,800 shares of common stock and (b) 434,800 shares of common stock issuable upon exercise of the warrants.
(6) Consists of (a) 434,800 shares of common stock and (b) 434,800 shares of common stock issuable upon exercise of the warrants.
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Welcome to the China Power Equipment board.
http://www.chinapower-equipment.com/read2.asp?ids=79,69
China Power Equipment, Inc.(OTCBB:CPQQ), through its subsidiary, Xi'an Amorphous Zhongxi Co., Ltd., utilizes proprietary, patented technology to produce 10kV and 35 kV traditional transformers, amorphous alloy cores and 10kv amorphous alloy transformers, which are a new generation of energy saving transformers. The Company produces 55 different models of transformers in four product series which are sold throughout China.
The Company was formed in 2005 as a U.S. corporation, and in February 2006, was granted a license as a privately held, Wholly-Owned Foreign Enterprise, or "WOFE", by the Chinese government.
The Company currently has two patents for the production technology of amorphous alloy transformers and one patent for equipment for the production of amorphous alloy cores in China. Leveraging the properties of amorphous alloy materials and its advanced manufacturing process, China Power's transformers reduce up to 80% of the no-load loss generated by transformers with a silicon steel core.
As China continues its rapid transition from an agricultural to an industrial economy the drain on the nation's existing power grid is substantial. In response to this and the PRC's increasing attempt to reduce its impact on the environment, the Chinese government has issued a series of measures demanding improved efficiency and decreased emissions from its corporations, thus making it a priority to use energy-saving products and equipment. These regulations specify new energy codes for the manufacturers and sale of transformers and require enterprises which utilize transformers required to give priority to energy-saving transformers, such as those produced by the Company.
Meanwhile, the Company is the only enterprise that can manufacture amorphous products in the western region on a large-scale.
NEW YORK, Aug 18, 2009 /PRNewswire-Asia-FirstCall via COMTEX/ -- China Power Equipment, Inc. ("China Power") (OTC Bulletin Board: CPQQ) today reported its operating results for the second quarter of 2009.
Net revenues for the six months were $8,590,671, an 88% increase over the first six months of 2008. Net income for the period nearly doubled to $1,634,383, or $0.11 per share, as compared to $822,141, or $0.06 per share for the first six months of 2008. These improvements were largely due to the Company's strong performance in the second quarter. Revenue for the period was $5,888,375, more than double the $2,236,584 earned in the second quarter of 2008. Net income for the second quarter of 2009 was $1.3 million, or $0.09 per share, as compared to $310,746, or $0.02 per share, for the same period in 2008.
The increases to net income as a percent of sales reflect a decrease in the selling, general and administrative expenses, which were 4% of revenues in the second quarter of 2009 as compared to 8% of revenues for the same period in 2008.
Yong Xing Song, Chairman of the Board of the Company, stated, "We are quite pleased with the Company's performance during the second quarter. The improved results reflect the investment we have made in our product line and sales effort. We expect these trends will continue as China's economy continues to expand, and with it, the demand for efficient, clean transfer of energy. We look forward to building on the strong foundation we have built with many of the regional utilities and government agencies as they continue to increase and improve China's power grid."
461,634 Prepaid expenses and other receivables 320,256 257,700 Total Current Assets 5,841,874 4,575,084 Related party receivables 23,781 97,248 Property, plant and equipment, net 3,693,776 3,116,422 Intangible assets, net 423,388 220,742 Long-term investment 244,245 236,384 Deposit on contract rights 1,314,867 1,313,064 Prepaid capital lease 114,106 116,694 Total Assets $11,656,037 $9,675,638 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $943,584 $710,480 Accrued liabilities and other payables 499,359 409,040 Advance from customers 33,242 142,156 Lease payable - current portion 1,947 1,944 Note payable 58,439 58,358 Value-added tax payable 72,609 64,686 Income taxes payable 348,550 235,262 Related party payable 1,169 1,167 Total Current Liabilities 1,958,899 1,623,093 Long-term Liabilities Lease payable - non current portion 117,489 117,327 Total Long-term Liabilities 117,489 117,327 Stockholders' Equity Preferred stock: par value $0.001 per share, 10,000,000 shares authorized; None issued and outstanding at March 31, 2009 and December 31, 2008 -- -- Common stock: par value $0.001 per share, 100,000,000 shares authorized; 14,908,313 shares issued and outstanding at June 30, 2009 and December 31, 2008 14,908 14,908 Additional paid in capital 7,176,041 7,176,041 Statutory surplus reserve fund 202,665 202,665 Retained earnings/(Accumulated deficit) 1,171,412 -462,971 Accumulated other comprehensive income 1,014,623 1,004,575 Total stockholders' equity 9,579,649 7,935,218 Total Liabilities and Stockholders' Equity $11,656,037 $9,675,638 China Power Equipment, Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended, Six Months Ended, June 30, June 30, 2009 2008 2009 2008 Revenue, net $5,888,375 $2,236,584 $8,590,671 $4,566,249 Cost of goods sold -4,510,872 -1,727,023 -6,663,451 -3,312,075 Gross profit 1,377,503 509,561 1,927,220 1,254,174 Selling, general and administrative expenses 224,650 176,589 425,217 335,793 Net income (loss) from operations 1,152,853 332,972 1,502,003 918,381 Other income (expenses) Gain on investment 21,409 40,045 51,373 62,253 Other income 350,881 -- 350,881 13,936 Interest income 1,441 235 5,815 2,467 Interest expense -- -56,214 -117 -79,516 Foreign exchange loss -- -- -- -2,712 Total other income 373,731 -15,934 407,952 -3,572 Net income before income taxes 1,526,584 317,038 1,909,955 914,809 Income taxes 220,222 6,292 275,572 92,668 Net income after income taxes $1,306,362 $310,746 $1,634,383 $822,141 Earnings per share - basic $0.09 $0.03 $0.11 $0.08 Earnings per share - diluted $0.09 $0.02 $0.11 $0.06 Weighted average common shares outstanding: Basic 14,908,313 10,886,413 14,908,313 10,879,246 Diluted 14,908,313 14,908,313 14,908,313 14,901,146
ABOUT CHINA POWER EQUIPMENT, INC.
China Power Equipment, Inc., through its wholly-owned subsidiary, Xi'an Amorphous Zhongxi Co., Ltd., has developed a proprietary, patented technology to produce a new generation of energy saving transformers and transformer cores. The Company currently manufactures 55 different models of transformers in four product series which are sold throughout China. The Company was formed in 2006 as a U.S. corporation, and in November 2006, formed a Chinese subsidiary which was granted a license as a privately held, Wholly-Owned Foreign Enterprise, or "WOFE", by the Chinese government.
Safe Harbor
Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings, including our Prospectus dated November 7, 2008, and 10-K filed on March 31, 2009 and our other recent filings. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.
For More Information on China Power Equipment, Inc., visit the website at: http://www.chinapower-equipment.com
For more information, please contact: Tel: +1-866-374-1957 (US) Email: xa-fj@xa-fj.com
SOURCE China Power Equipment, Inc.
URL: http://www.chinapower-equipment.com www.prnewswire.com
Copyright (C) 2009 PR Newswire. All rights reserved
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